Daily update
Daily update
- US July producer price data are due. Producer prices better represent corporate pricing power than consumer prices. (Consumer prices are a combination of the pricing power of retailers, and the power of imagination in devising owners’ equivalent rent.) This means the real fed funds rate is around 3% for companies—an unnecessarily restrictive rate.
- UK labor market data for the three months to June were generally good. Unemployment dropped suddenly—a reminder that labor market data can exhibit sudden and unexpected moves in either direction. Wage growth is slowing, but slowing less than inflation. It might be possible to see upside potential to fiscal revenues from the labor market.
- There are some business sentiment polls due. The German ZEW survey of the economy has to contend with the underperformance of manufacturing relative to services. The US NFIB small business survey has been accused of reflecting politics more than reality, which is a growing risk in the polarized environment in the US at the moment.
- Former US President Trump held an event with Tesla CEO Musk. Investors are increasing their focus on policy, but there were not really any coherent policy proposals on this occasion. Trump did sound more supportive of electric vehicles, but that may just reflect Musk’s presence.
